DC Plan that invests into a DB Plan

[Guest ahayford]

Has anyone come across a defined contribution plan that invests into their own defined pension plan. The point being to receive the same rate of return as the pension does. I'm assuming there would need a seperate account for the DC funds.

[GBurns]

Maybe I am missing something.

I thought that Plans made money by making investments such as purchasing shares of corporate entities, Bonds or other securities. And that it was the money earned from those securities tha was used to calculate the rate of return.

How can the DC plan make money investing in another plan? What does the DC purchase? Shares, Rights, What?

If I want to make the same rate of return as anyone/anything else I have to either purchase the same securities on the same terms or purchase something similar and hope that the similarity holds.

[Lori Friedman]

I think I'm missing something...

The DBP can make expenditures to (1) provide benefits to plan participants and their beneficiaries and (2) pay the normal, reaonable costs of administering the plan. It can't pay out any interest, dividends, or whatever to some party that has made an "investment" in its assets.

[WDIK]

ahayford:

Are you trying to describe a situation where there is a single trust for both plans?

[No Name]

For what its worth, I had a DB/MP combo with a combined trust. The corporate resolutions stated that earnings first went to the DB up to the actuarial interest assumption. Excess was credited to the MP. All participants were in both plans. A random audit came out clean. They're kind of laid back here in CA. FWIW.